Micron Acquires P5 Wafer Fab from PSMC in Taiwan
2026-01-19
Micron Technology, a global leader in memory chips, has been actively expanding its global production capacity to meet the growing market demand. On January 17, 2026, Micron announced the signing of an exclusive letter of intent with PSMC to acquire PSMC's P5 wafer fab located in Tongluo Township, Miaoli County, Taiwan, for a total cash consideration of $1.8 billion. The acquisition includes a 12-inch wafer fab with a cleanroom area of approximately 300,000 square feet, aimed at rapidly expanding Micron's DRAM production capacity.
Manish Bhatia, Micron's Executive Vice President of Global Operations, stated that this strategic acquisition will complement Micron's existing operations in Taiwan, effectively boosting production capacity and enabling the company to better serve customers in a market environment where demand continues to outstrip supply. Additionally, the geographical proximity of the Tongluo site to Micron's Taichung facility is expected to enhance operational synergies and further optimize resource utilization and production efficiency.
Details of the Wafer Fab Acquisition and Transaction Process
Micron expects the site to start contributing significantly to its DRAM wafer output in the second half of 2027. Industry analysis indicates that once fully ramped up, the P5 site will be capable of producing approximately 50,000 12-inch wafers per month, potentially increasing Micron's overall annual DRAM production capacity by 10% to 15% in the short term. This acquisition holds significant strategic importance for meeting the surging memory demands in areas such as artificial intelligence, high-performance computing, and data centers.
Partnership and Future Outlook
This acquisition is not only a crucial step in Micron's global capacity expansion strategy but also marks the establishment of a long-term strategic partnership between Micron and PSMC. Under the letter of intent, Micron will entrust PSMC with wafer back-end packaging and testing services, while PSMC will receive support from Micron in its traditional DRAM product portfolio. This cooperation model will not only help Micron rapidly enhance its production capacity but also assist PSMC in optimizing its operational structure.
Frank Huang, Chairman of PSMC, said that the rise of AI applications has driven the prosperity of the global DRAM market, and the rapid capacity expansion of the Tongluo plant has become the fulcrum of a win-win cooperation between Micron and PSMC. The sale of the Tongluo plant will improve PSMC's financial condition and enable it to be included in Micron's advanced DRAM packaging supply chain after passing Micron's certification.
With the rapid development of AI technology and the deepening of cloud computing and big data applications, the market demand for advanced DRAM products such as high-bandwidth memory (HBM) and DDR5 continues to surge. Through this acquisition, Micron will not only be able to quickly increase its effective production capacity but also gain a more advantageous position in the global memory chip market.
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